ING Direct 2015 Annual Report Download - page 38

Contents
Who we are
Report of the
Management
Board
Corporate
Governance
Consolidated
annual accounts
Parent company
annual accounts
Other
information
Additional
information
Notes to the Consolidated annual accounts of ING Bank - continued
Reference is made to Note 36 ‘Fair value of assets and liabilities’ and the section ‘Risk management – Market risk’ for the basis of the
determination of the fair value of financial instruments and related sensitivities.
g) Principles of valuation and determination of results
Consolidation
ING Bank (‘the Bank’) comprises ING Bank N.V. (‘the Company’) and all its subsidiaries. The consolidated financial statements of ING
Bank comprise the accounts of ING Bank N.V. and all entities in which it either owns, directly or indirectly, more than half of the voting
power or over which it has control of their operating and financial policies through situations including, but not limited to:
• Ability to appoint or remove the majority of the board of directors;
• Power to govern such policies under statute or agreement; and
• Power over more than half of the voting rights through an agreement with other investors.
Control exists if ING Bank is exposed to variable returns and having the ability to affect those returns through power over the investee.
A list of principal subsidiaries is included in Note 46 ‘Principal subsidiaries’.
The existence and effect of potential voting rights that are currently exercisable or convertible are considered in assessing whether ING
Bank controls another entity.
For interests in investment vehicles, the existence of control is determined taking into account both ING Bank’s financial interests for
own risk and its role as investment manager.
The results of the operations and the net assets of subsidiaries are included in the profit and loss account and the balance sheet from
the date control is obtained until the date control is lost. On disposal, the difference between the sales proceeds, net of directly
attributable transaction costs, and the net assets is included in net result.
A subsidiary which ING Bank has agreed to sell but is still legally owned by ING Bank may still be controlled by ING Bank at the balance
sheet date and therefore, still be included in the consolidation. Such a subsidiary may be presented as a held for sale disposal group if
certain conditions are met.
All intercompany transactions, balances and unrealised surpluses and deficits on transactions between Bank companies are
eliminated. Where necessary, the accounting policies used by subsidiaries are changed to ensure consistency with ING Bank’s policies.
In general, the reporting dates of subsidiaries are the same as the reporting date of ING Bank N.V.
ING Bank N.V. and its Dutch group companies are subject to legal restrictions regarding the amount of dividends they can pay to their
shareholders. The Dutch Civil Code contains the restriction that dividends can only be paid up to an amount equal to the excess of the
company’s own funds over the sum of the paid-up capital and reserves required by law. Additionally, certain Bank companies are
subject to restrictions on the amount of funds they may transfer in the form of dividends, or otherwise, to the parent company.
Furthermore, in addition to the restrictions in respect of minimum capital requirements that are imposed by industry regulators in the
countries in which the subsidiaries operate, other limitations exist in certain countries.
Disposal groups held for sale and discontinued operations
Disposal groups (and groups of non-current assets) are classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use. This is only the case when the sale is highly probable and the disposal
group (or group of assets) is available for immediate sale in its present condition; management must be committed to the sale, which
is expected to occur within one year from the date of classification as held for sale.
Upon classification as held for sale, the carrying amount of the disposal group (or group of assets) is compared to it's fair value less
cost to sell. If the fair value less cost to sell is lower than the carrying value, this expected loss is recognised through a reduction of the
carrying value of any goodwill related to the disposal group and the carrying value of certain other non-current non-financial assets.
Any excess of the expected loss over the reduction of the carrying amount of these relevant assets is not recognised upon
classification as held for sale, but is recognised as part of the result on disposal if and when a divestment transaction occurs.
ING Bank Annual Report 2015 36